Investing in people - the biggest competitive advantage in manufacturing?

When we talk about investment in a manufacturing environment, we often think of new machinery, equipment and automation. These are important, but all too often it is forgotten that the biggest competitive advantage can be found in people!

Research evidence supports this claim. Ossi Aura's extensive research found that a good leadership improve the company's operating margin by more than a couple of percentage points. This represents a million-dollar advantage for a medium-sized manufacturing company. So investing in management is not just a fiddly job, it is directly reflected in the bottom line.

Good leadership builds a psychologically safe working environment where people dare to express their ideas and ideas for development. This leads to innovation and continuous improvement in everyday life. Clear rules and the support of a front-line manager increase well-being, reduce problems and free up management time for development.

Leadership is also directly linked to employer image.

A company with open communication and good people attracts new talent and helps retain existing talent - a crucial advantage, especially in a talent shortage. We can also say that, from our own experience, all of the above is very true. In other words, management has a direct link with employer image.

Let's take an example from years ago. When we were working as summer interns in factories, we saw and experienced situations where communication was unclear and feedback was not given. Workers' motivation suffered and confusion grew, even when there was a lot of potential. For example, Janne was sometimes at a production cake party, but his colleagues couldn't tell him what was being celebrated. The cakes and coffees were good, but a good communication could have been a great place to start!

In our current work as coaches, we have also seen examples of clear, inclusive leadership that has been proven to raise the level of the whole work community. Investing in people is not a soft alternative to investing in machinery, but a necessity alongside it.

Machines do what they are told - people do what they understand and commit to.

Therefore, investing in management can be the biggest competitive advantage in production, or ignoring it can be the biggest destroyer of competitive advantage.